The catalyst for this latest spat was Great Wall Motor Chairman Wei Jianjun's candid remarks last week, where he voiced significant apprehension about the deepening price war gripping the Chinese auto market. Wei went as far as to draw a stark parallel between the industry's current predicament and the catastrophic collapse of Evergrande, the Chinese property developer that was liquidated due to its immense debt crisis.
Although he refrained from naming specific companies, his ominous comparison sent ripples of concern throughout the market, contributing to a slide in the shares of major Chinese automakers, including BYD, Nio, and XPeng. The implication was clear: the relentless pricing pressure was hammering the bottom lines of car manufacturers and their intricate network of suppliers.
In a swift and forceful rebuttal, Li Yunfei, BYD’s general manager of branding and public relations, vehemently dismissed any notion of an Evergrande-esque crisis among leading automakers. He expressed bewilderment at online speculation suggesting Wei's remarks were aimed at BYD.
In a comprehensive post on Weibo, a popular Chinese social media platform, Li robustly defended BYD's financial health, particularly its 70% debt-to-asset ratio and its over 580 billion yuan debt. He contextualized these figures by drawing comparisons with global automotive giants like Ford, Boeing, and Toyota, asserting that BYD's debt was a natural consequence of its aggressive and rapid growth, especially in contrast to some rivals who had experienced stagnation. Li, however, did not explicitly name these stagnating competitors.
Beyond his financial defense, Li Yunfei also issued a stern warning, stating that BYD intends to pursue legal action against online users who propagated what he deemed as baseless speculation. He confirmed that "evidence" had been handed over to Chinese authorities, signaling BYD's determination to combat what it perceives as damaging misinformation. Great Wall Motor, when approached for comment, did not immediately issue a response.
The current public skirmish is hardly an isolated incident in the ongoing rivalry between BYD and Great Wall Motor. The two automotive heavyweights have a history of public clashes. In 2023, Great Wall Motor made headlines when it announced it had filed a report with Chinese regulators against BYD, alleging that two of BYD’s top-selling hybrid models failed to meet emissions standards. Later that same year, BYD itself ignited controversy by issuing a rallying cry for the Chinese auto industry to unite and "demolish the old legends" of the global market, a statement that drew a sharp rebuke from Great Wall Motor.
Despite the expressions of concern from both Chinese automakers and various industry players, the relentless auto price war shows little signs of abating. Indeed, the intensity of the competition was further evidenced this week when several automakers, following BYD’s lead, unveiled fresh incentives and discounts on their vehicles, further exacerbating the pricing pressure.
Intriguingly, not all industry voices have sided with BYD in this latest dispute. At least one other prominent Chinese automaker has publicly expressed support for Great Wall Motor's Wei. Zhu Huarong, the chairman of state-owned automaker Changan, reportedly told an annual shareholder meeting earlier this week that Wei's comments served as a vital reminder to the industry about the critical need to pay closer attention to inherent risks.
This divergence of opinion within the industry highlights the complex and often conflicting perspectives on the current state and future trajectory of China's burgeoning automotive market. The ongoing public discourse between BYD and Great Wall Motor, therefore, is not merely a corporate spat, but a microcosm of the broader challenges and strategic considerations facing an industry in the throes of rapid transformation and intense competition.